After several days of equities correcting, basis the March contract, the emini S&P has rallied for the past two days. The market may be nearing another longer-term buy signal within the next couple of days. But on a technical note, the market rally may be a little overdone. There is strong resistance in the 1110 to 1120 area.

Majority of the earnings reports have been released with many beating estimates reported by Bloomberg. On Friday the Jan 2010 unemployment report will be released. We believe the focus is on Friday's jobs report. As well the ADP Employment Report will be released today.

As we wrote about on 1/24/10, we received a confirmed sell signal in equities on 1/20/10. We were looking for major support around 1059 to 1040. The market did reach a low of 1066.50 on 1/29/10.

If we do not receive a new buy signal, than the market may try to test the recent lows of 1066.50 soon. If the 1040 price level is broken than we should see major support in the 950 price range.

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